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Solar energy supplied by Lightforce
Solar energy supplied by Lightforce

PartnersJanuary 28, 2022

How the sun’s power is changing our electricity market

Solar energy supplied by Lightforce
Solar energy supplied by Lightforce

Utilising solar power would allow New Zealand to hit our carbon zero targets quickly, and save people money in the long run. But how exactly does it work? 

Life on Earth wouldn’t be possible without the sun. It’s essential for growing things, it makes us feel good when we’re basking in it and it is a crucial component of sunset photos on Instagram. The sun is also proving to be an increasingly important and affordable source of renewable energy as the world starts to walk away awkwardly from fossil fuels. 

The content was created in partnership with Lightforce, the country’s fastest-growing solar energy company. Lightforce is on a mission to create a lighter, brighter future. Find out how going solar can help you save money and reduce your impact on the environment.

So, how does solar power work? 

The sun is a large, gaseous ball around 150 million kilometres away. Old Brighty is constantly spitting out radiation, like a big nuclear fusion reactor in the sky and, as MIT puts it: “A total of 173,000 terawatts (trillions of watts) of solar energy strikes the Earth continuously. That’s more than 10,000 times the world’s total energy use.” 

Back in 1940 a researcher at Bell Labs named Russell Ohl noticed that silicon produced an electrical current when exposed to light. Now, photovoltaic (PV) cells are placed in panels with conductors, the sun’s energy generates a current, and an inverter then turns it into electricity that we can use to charge our toothbrushes (among many other things). 

So it’s basically like having your own little power station on your roof? 

Pretty much. Lightforce CEO Luke Nutting tries to get people to think about the difference between owning and renting. When it comes to where we live, most of us understand that distinction, but we don’t tend to think that way when it comes to electricity. 

As he wrote: “The vast majority of us in New Zealand are simply tenants, forced to keep paying big electricity landlords exorbitant rent, even though there is an option that would allow us to own our power: solar energy.”

Good point. But solar is still quite pricey, isn’t it? 

The cost of solar panels has decreased by about 90% over the past decade and the International Energy Agency recently called solar the cheapest form of energy humans have ever created. The performance has also improved so we can now get more energy out of each cell.

There is still a reasonable upfront cost, but this big number can be overcome when you look at the long-term benefits (and there are plenty of financial options that can spread that cost out over a few years). Most systems in New Zealand are now able to be paid off between five and seven years, depending on where you live, how much you’re currently paying for electricity and how much you use, and then it’s all savings after that. Residential electricity prices went up by 48% between 2000 and 2018 and prices seem unlikely to fall, so, when combined with the decreasing price of panels, it increasingly stacks up. Plus, can you put a price on smugness? 

Not really. So solar must be booming, then?  

Sure is. In Australia, solar has almost 30% market share and the US is hoping to generate 50% of its energy from solar by 2050. New Zealand’s solar adoption currently sits at around 1.3% of the country’s total electricity connections, but it’s growing fast. In 2021, SEANZ says total installs grew by around 36% on the previous year. 

I’m among the increasing number of New Zealanders who decided to invest in solar and Lightforce installed 28 panels on our roof in Wānaka, along with a battery system and an EV charger. Based on our annual electricity spend, Lightforce estimated it would be paid off in around five years. 

Can anyone chuck a few panels up on the roof? 

Some homes aren’t suitable for solar due to their orientation or roof type. Lightforce can quickly figure out if it’s right for you and, if it is possible, it pays to be sure you’ll be staying put for a while as you can’t take the panels with you (it’s hard to quantify the value of solar to house prices, but found that properties with a 3KW solar system made 4.4% or $35,000 more than other comparable properties nearby when they sold).

Solar makes good sense for people who work from home (like me) and use the energy that’s generated during the day. And it’s also great for the growing number of New Zealanders who own EVs. When we’re fuelling up our car for “free” while the sun’s shining (and when you see petrol prices steadily increasing), it feels like we’re somehow hacking the system. 

(Image: Supplied)

What changes when you have it installed? Do I need to do anything?

Once the system has been signed off and switched on, it pretty much all happens automatically. If you’re into data-heavy dashboards, it can actually be quite addictive. Plenty of people take their electricity completely for granted, but Nutting says its customers tend to become much more interested in it because they can see their generation and consumption happening in real-time on an app. In my experience, when the sun is shining, it’s hard not to check in to see how our little power station is performing and we’ve changed our behaviour slightly and try to run appliances during the day. 

So can you only use electricity when the sun’s out? 

That used to be the case, but the biggest development in the solar sector has been the arrival of batteries that can store energy. Lightforce, which is responsible for around 20% of all New Zealand’s solar installs, now puts Energizer Homepower batteries in around 80% of its jobs. 

The average New Zealand house uses between 7,000-8,000kw of electricity every year (or approximately 1kw every hour). That varies depending on the type of house and where you live, but our 15kw battery can power the house for a few hours at night or in the morning (some also believe we might soon be able to use the big batteries in our EVs to power our homes when they offer bi-directional charging). 

When you’re not generating enough power from your panels or your battery has been emptied, your house simply slurps up the energy it needs automatically from the grid (the power infrastructure most people rely on for electricity), so you won’t ever go without power if the sun’s not shining – and you can still generate quite a lot of electricity even when it’s cloudy. Since we’ve had it installed, we’re between 80-90% self-sufficient and when there’s excess energy, that gets sent back to the grid and you get paid for it. The buyback rate is pretty low, but it’s not uncommon for solar users to have $0 electricity bills or even get credits. 

(Image: Supplied)

Are businesses getting into solar too?

In many cases, commercial solar makes even more sense because of the need for electricity during the day. There’s also been a heap of attention paid to the wholesale price of electricity recently, which was particularly volatile last year and led to a review by the Electricity Authority (end result: some evidence of unfair pricing and New Zealanders are potentially subsidising Tiwai Aluminium Smelter, which gets a sweetheart deal on its electricity). According to the Major Energy Users Group, which has been calling for government intervention into the electricity sector due to rapidly rising prices, electricity is likely to be one of the top three costs a business faces, so solar is seen by some as a good way to reduce those costs over the long term. 

Nutting says plenty of businesses are also going solar to reduce their carbon emissions and as the cost of carbon increases, offsetting emissions is becoming more expensive, which provides an additional incentive for businesses to switch.

So it’s good for the wallet, and for the planet? 

New Zealand has committed to being net zero carbon by 2050. Our electricity demand is expected to double by 2050 as we put more EVs on the roads and electrify various industrial processes that have traditionally used fossil fuels. A high proportion of New Zealand’s electricity already comes from renewable sources, primarily hydro, but in 2021, due to low lake levels and restricted gas supply, we burned more coal than we have in ten years just to keep the lights on. We need more large-scale renewable generation to cope with that predicted increase in demand (47% more, according to Transpower), but we also need more individual homes and businesses to generate their own energy and reduce their own emissions. A report for Transpower showed that solar generation, EVs, battery storage and technology that helps to manage electricity use (something called Distributed Energy Resources) could reduce pressure on the grid during times of peak demand and would also lead to $2.3 billion for those who generate excess energy to feed back in. 

(Image: Supplied)

If solar’s so great, shouldn’t the government be incentivising it, like it’s doing with electric cars? 

Solar subsidies are pretty common overseas (in Australia, over 2.5 million households have solar). But adoption is expected to increase rapidly here even without a subsidy. 

As Nutting wrote: “Transpower NZ released a report in 2019 predicting a range of scenarios for the future of New Zealand’s electricity sector. One of those scenarios, which was focused on creating the cleanest possible energy system, estimated that 70% of New Zealand’s 1.8 million homes and 40% of the 300,000 businesses would have solar by 2050.” 

One day, the sun will explode, and solar panels won’t work. Also, life on Earth will cease. But that’s likely to be around five billion years away. Until then, we need to find ways to generate more electricity, transport ourselves and run our economy without burning old plants or animals. Solar technology continues to improve, the price of panels continues to fall, the price of electricity keeps going up, the grid is groaning and the planet is warming. 

So you’re telling me the stars are aligning for solar. 

The future’s bright. It’s time to let the sun in.

Keep going!